March 2023 Client Alert

Client alert

March 2023

NLRB Issues Sweeping Decision Declaring Confidentiality and Non-Disparagement Clauses in Severance Agreements Unlawful

By James B. Sherman, Esq.

In February the National Labor Relations Board reversed Trump-era Board precedent, and arguably expanded its precedent from the Obama administration, to declare unlawful two clauses commonly used by employers when offering severance packages. The decision in McLaren Macomb, Case No. 07-CA-263041 (2/21/2023) held that the employer, a Michigan hospital, violated the National Labor Relations Act by offering 11 permanently furloughed employees severances conditioned on typical release agreements that included confidentiality and non-disparagement provisions. The Board unanimously found that the employer committed unfair labor practices by failing to notify and bargain with the employees’ union, OPEIU Local 40, over its decision to furlough the employees, and by circumventing the union to present them with individual severance agreements. The Board also found based on the ULPs committed by the employer, that the severance agreements were also unlawful. However, the Biden appointed majority went on to hold that the confidentiality and non-disparagement terms in the agreements, were unlawful standing alone, regardless of the other unfair labor practices the employer committed. In doing so the Board’s majority reversed existing precedent and opened the door for challenges to virtually any severance agreement, union or no union, group or individual, regardless of circumstances. Unless overturned on appeal this decision will have far-reaching effects on virtually any release agreements that offer employees severance payments in exchange for releasing claims and conditioned also on commonly used confidentiality and non-disparage terms.

Questions? Contact attorney James B. Sherman at (952) 746-1700 or by email

Protecting Employers Since 1985

Questions? Contact attorney Anthony Caruso (630) 377-1554 or by email

Illinois Employers Be Alert: The CROWN Act Will Protect Natural Hairstyles in the Workplace

By Anthony J. Caruso, Jr., Esq.

On June 29, 2022, Governor J.B. Pritzker signed into law the CROWN (Create a Respectful and Open Workplace for Natural Hair) Act, and it went into effect January 1, 2023.

What is changed: The CROWN Act amends the Illinois Human Rights Act in an expanded definition of protection due to race.

What is the new definition of race: “Race” includes traits associated with race, including, but not limited to, hair texture and protective hairstyles such as braids, locks, and twists.

What employers are covered: Employers with one or more employees in the State of Illinois.

Remedies under the law: An employee may file a charge of race discrimination due to natural hairstyle with the Illinois Department of Human Rights.

In conclusion: The length of a natural hairstyle may be problematic for employers in some situations such as machine operators or food workers. Can an employer require an employee with long natural hair to cover up the hair to prevent entanglement in a machine or hair in the food of a customer? Normally in these situations, employers could require a cover-up of the hair for safety or food hygiene.

In view of these new protections for natural hairstyles, Illinois employers should be sure to seek advice of legal counsel for a legal review and update of their current policies on appearance and discrimination.

At least 19 states have adopted similar legislation, most recently Minnesota, in February 2023.

NLRB Returns to Micro Units in NLRB Election Cases

The pro union Board has returned to the Specialty Healthcare appropriate unit standard. This pretty much means that Unions will get whatever they want as the voting unit for a union organizing election. Click here for the NLRB’s press release.

Questions? Contact Richard Wessels at (630) 377-1554 or by email